Professional Documents
Culture Documents
2001)
Appeal from the United States District Court for the Eastern District of
Pennsylvania Magistrate Judge: Thomas J. Rueter, (Civil No. 97-cv05532)[Copyrighted Material Omitted]
Counsel for Appellants/Cross-Appellees: Thomas P. Bracaglia, Esq.
(Argued) Frank S. Nofer, Esq. Kelly, McLaughlin & Foster 1617 John F.
Kennedy Boulevard Suite 1690 Philadelphia, PA 19103
Counsel for Appellee/Cross-Appellant: Carl D. Buchholz, III, Esq.
(Argued) Thomas A. Kuzmick, Esq. Michael A. Meehan, Esq. Rawle &
Henderson 1339 Chestnut Street 1 South Penn Square Widener Building
16th Floor Philadelphia, PA 19107
Before: McKEE, Rosenn, and CUDAHY,* Circuit Judges.
Cudahy, Circuit Judge.
On September 12, 1995, Michael Kirschbaum fell down a stairway in the GSB
Office Building, located in Bala Cynwyd, Pennsylvania. Kirschbaum sustained
serious injuries as a result of the fall and, seeking compensation for these
injuries, sued the building's owner, WRGSB Associates (WRGSB). In turn,
WRGSB filed a third-party complaint against Insignia Commercial Group
(Insignia), the building manager with whom WRGSB had contracted to
manage, maintain and repair the building. Both parties settled with
Kirschbaum, but retained their respective rights of contribution and indemnity.
The United States District Court for the Eastern District of Pennsylvania
apportioned liability equally between the two parties and required each party to
pay half of the settlement amount. The parties appeal, each seeking to have the
other bear the full cost of settlement. We affirm.
I. BACKGROUND
2
Kirschbaum sued WRGSB, the owner of the building, and the district court
properly asserted jurisdiction over the matter pursuant to 28 U.S.C. 1332.
Kirschbaum alleged that he tripped on a step (also known as a "riser") that was
5/8 of an inch taller than the other steps in the stairwell, and further stated that
he was subsequently unable to arrest his fall due to the broken handrail. As
such, Kirschbaum alleged two causes of his fall: (1) the riser height discrepancy
Because WRGSB had hired Insignia to not only manage, but also maintain and
repair, the building--including the stairwell in which Kirschbaum was injured-WRGSB brought a third-party action against Insignia, seeking contribution or
indemnification. The district court exercised supplemental jurisdiction over
Insignia pursuant to 28 U.S.C. 1367. WRGSB maintained that it relied on
Insignia to manage and maintain the GSB building, and that Insignia was paid
handsomely to do so. WRGSB further stated that it did not have any employees
on site because Insignia provided several on-site management and engineering
personnel pursuant to the property management agreement. As a result,
WRGSB maintained that Insignia ought to be solely responsible for the injuries
Kirschbaum sustained as a result of the riser height discrepancy and broken
handrail, both of which WRGSB believed that Insignia was responsible for
correcting under the property management agreement.
All of Kirschbaum's claims were settled on September 14, 1998, with WRGSB
and Insignia each contributing half of the $1,750,000 settlement amount, but
retaining their respective rights of indemnity and contribution. Subsequently,
both parties filed motions for summary judgment, seeking to have the other
bear the full cost of settlement. The parties based their motions for summary
judgment on contradictory interpretations of the property management
agreement: WRGSB argued that, under the terms of the agreement, Insignia
was wholly responsible for maintaining the stairwell, while Insignia contended
that WRGSB was required, under the agreement, to purchase insurance and
fully indemnify Insignia.
Following the motions for summary judgment, the magistrate judge assigned to
the case issued a report and recommendation which concluded that both parties
were equally negligent in causing Kirschbaum's fall. In accordance with this
determination, the magistrate judge recommended that the parties bear the cost
of settlement equally. The district court adopted most of the magistrate judge's
report and recommendation, but referred the apportionment of liability issue
back to the magistrate judge for an evidentiary hearing.
handrail was still broken on the day of the accident. Nonetheless, Grinnan never
notified WRGSB or Kirschbaum that the handrail was broken. Insignia
countered by calling Charles Goedken, a civil engineer, as its expert witness.
He testified that there was a 5/8 inch discrepancy in one of the stairway's risers,
that such a discrepancy did not conform to generally accepted engineering
standards and that such a discrepancy created a foreseeable risk of falling.
9
Following the hearing, the magistrate judge again found that WRGSB and
Insignia were equally liable for the settlement cost. The magistrate judge held
that WRGSB had a duty to discover and remedy the riser height discrepancy,
and that Insignia had a separate duty to repair the broken handrail. Accordingly,
the magistrate judge ordered them each to pay one half of the settlement
amount. WRGSB appeals, and Insignia cross-appeals. We have jurisdiction
under 28 U.S.C. 636(c)(3) & 1291.
II. DISCUSSION
10
11
Because this is a diversity case, we must first determine the substantive state
law that is to govern our decision. In making this determination, we first look to
the conflict of laws rules of the forum state, Pennsylvania. See Assicurazioni
Generali, S.P.A. v. Clover, 195 F.3d 161, 165 (3d. Cir. 1999). For substantive
tort law issues, Pennsylvania uses a combination of the "government interest"
and "significant relationship" approaches to conflict of laws analysis. Under
this analysis, "a court must evaluate `the extent to which one state rather than
another has demonstrated, by reason of its policies and their connection and
relevance to the matter in dispute, a priority of interest in the application of its
rule of law.' " See Troxel v. A.I. duPont Inst., 636 A.2d 1179, 1181 (Pa. Super.
Ct. 1994). Neither party disputes that Pennsylvania law applies to the tort
aspects of this case, and our review of the facts confirms that the parties are
correct: this case involves an accident in Pennsylvania on a stairwell that is
subject to Pennsylvania building codes and regulations. As such, Pennsylvania
has a priority interest in the application of its tort law to this cause. However,
because the property management agreement so specifies, see Agmt. at S 7.3,
Illinois' substantive law of contracts applies to interpretation of the agreement.
See Kruzits v. Okuma Mach. Tool, Inc., 40 F.3d 52, 55 (3d Cir. 1994)
(Pennsylvania law generally respects parties' choice of law).
A. WRGSB's Appeal
12
13
WRGSB's remaining arguments can all be reduced to one claim: that Insignia
should be responsible for the entire settlement amount because the property
management agreement obligated Insignia to discover and correct defects in
both the stair risers and the handrail. Both parties agree that Insignia was solely
responsible for repairing the defective handrail.2 Therefore, our discussion
focuses primarily on which party must accept responsibility for the injuries
arising out of the riser height discrepancy.
14
As owner of the GSB building, WRGSB is charged with the following duty:
15
15
16
(a) knows or by the exercise of reasonable care would discover the condition
and should realize that it involves an unreasonable risk of harm to such invitees,
and
17
(b) should expect that they will not discover or realize the danger, or will fail to
protect themselves against it, and
18
(c) fails to exercise reasonable care to protect them against the danger.
19
20
The magistrate judge determined that WRGSB met these requirements, and
WRGSB does not dispute this finding except to argue that the riser height
discrepancy is a trivial defect--an argument that is related to WRGSB's ability
to discover the riser height discrepancy. In support, WRGSB cites several older
Pennsylvania cases where approximately 1.5 inch sidewalk and roadway
discrepancies were found to be trivial. See, e.g., Bosack v. Pittsburgh Railways
Co., 189 A.2d 877 (Pa. 1962); German v. City of Mckeesport, 8 A.2d 437 (Pa.
Super. 1939). While the riser defect here was only 5/8 inch, it occurred on a
stair riser, a place where the defect is likely to be far less obvious than on a flat
surface such as a road (and thus more difficult to protect against). Relatedly,
discrepancies of this kind are far more common (and therefore foreseeable) on a
sidewalk than on a flight of stairs. Indeed, Insignia's expert witness--whom the
district court found more credible than WRGSB's expert witness--testified that a
5/8 inch discrepancy created a foreseeable risk of falling. As such, the district
court did not err in determining that WRGSB was required to discover and
remedy the riser height discrepancy.
21
While WRGSB is thus charged with the duty to discover and repair the riser
height discrepancy, WRGSB argues that its relationship to Insignia is such that
Insignia is primarily liable to Kirschbaum for the injury he suffered as a result
of the riser height discrepancy. As a result, WRGSB believes that it is entitled
to indemnification from Insignia, a right that "enures to a person who, without
active fault on his own part, has been compelled, by reason of some legal
23
24
25
Appx. at 233 (emphasis added). WRGSB also cites two other sections of the
agreement as evidence of Insignia's alleged obligation to correct the riser height
discrepancy. Section 2.9 of the agreement states that Insignia must use due care
in the selection and supervision of its on-site personnel. See Appx. at 237. In
addition, 2.13 of the agreement requires Insignia to use its best efforts to
ensure that the GSB Building is kept in compliance with applicable building
codes. See Appx. at 240. WRGSB argues that these contract provisions clearly
transfer to Insignia the building owner's duty to discover and remedy all
hazardous conditions on the premises.
26
27
28
That maintenance and repairs do not include the obligation to discover latent
structural defects is also supported by the meaning commonly ascribed to these
words. "Maintenance" is defined by Webster's New World Dictionary 854 (2d
College Ed. 1979), to include "the work of keeping a building... in a state of
good repair." "Repair" is defined as "to put back in good condition after
damage, decay, etc." Id. at 1204. These definitions both point to the act of
fixing a deteriorated part of the building, which though originally sound, has
fallen into disrepair. The definitions do not contemplate fixing a part of the
building that was originally defective. Indeed, a finding that the agreement
required Insignia to discover the riser height discrepancy would necessarily
include a finding that Insignia is not only responsible for measuring every stair
riser in the GSB building, but also responsible for other acts that are clearly not
contemplated by the agreement, such as inspecting the building's foundation.
We therefore conclude that the agreement failed to delegate unambiguously the
duty to discover the riser height discrepancy to Insignia.
29
30
WRGSB's argument that it cannot be held to a greater duty of care than Insignia
fails for the same reason. The Restatement (Second) of Torts 324A (adopted
by the Pennsylvania Supreme Court in Cantwell v. Allegheny County, 483
A.2d 1350 (Pa. 1984)) imposes a duty of reasonable care on parties (like
Insignia) who render services for the protection of a third party (like
Kirschbaum). From this, WRGSB argues that any duty of reasonable care it
possessed by virtue of Restatement (Second) of Torts 322 was delegated to
Insignia by the agreement because Insignia assumed a duty of reasonable care
under Restatement (Second) of Torts 324A when it entered into the
Agreement. WRGSB might have a valid argument had it delegated its duty to
discover the riser height discrepancy to Insignia. However, WRGSB did not do
so. Consequently, it retained the duty to inspect for and discover the riser height
discrepancy and cannot shift liability for its failure to do so to Insignia.
31
32
34
A: They maintained, leased, and managed the property on behalf of the owner.
35
***
36
37
A: Yes.
38
***
39
40
A: Yes.
41
***
42
Q: Such maintenance would have involved repairing any condition found of the
stairwell or handrail leading from the underground parking garage to the GSB
Building...?
43
A: Yes.
44
Appx. 651-52, 658-60. Just as with the agreement's express language, this
testimony does not establish that Insignia was responsible for anything other
than maintenance and repair. And as we have discussed, the duty to detect and
correct latent structural defects does not follow from the duty to maintain and
repair. As such, the testimony of Insignia's employees does not show that
Insignia assumed WRGSB's common law responsibility to inspect for and
detect latent structural defects.
B. Insignia's Cross-Appeal
45
Having disposed of WRGSB's direct appeal, we turn next to Insignia's crossappeal. Even though Insignia has admitted its responsibility for maintaining the
handrail, it presents three unavailing arguments in hope of shifting the entire
cost of settlement to WRGSB: (1) that, pursuant to the agreement, WRGSB's
insurance policy covers Insignia as well; (2) that WRGSB has failed to prove
facts that are necessary to establish its right to contribution and indemnity from
Insignia; and (3) that Kirschbaum assumed the risk presented by the broken
handrail.
1. The Agreement's Insurance Provisions
46
Insignia argues that it should not have to pay its share of the settlement because
the agreement required WRGSB to purchase general liability insurance and to
name Insignia as an additional insured on the policy. The provision on which
Insignia relies states:
47
Owner shall carry, at its own expense, commercial general liability insurance in
such amounts that owner, in its sole and absolute discretion, deems necessary
for the protection of owner's interest in the Property, and such insurance shall
be deemed the primary insurance on the Property. Policies of commercial
general liability insurance carried by owner shall include manager... as an
additional insured party only in manager's capacity as manager of the property.
See Appx. 244; Agmt. 5.1. Insignia argues that the clear meaning of this
requirement is that WRGSB's insurance should cover Insignia. However, in
reaching its conclusion Insignia ignores 5.8 of the agreement, which states
that Insignia has no right to recover against WRGSB or its insurance carrier on
any claim to the extent that the claim arises out of Insignia's own negligence.
See Appx. at 246. As noted, Insignia has already admitted liability for the
handrail--a liability that clearly arises out of Insignia's own negligence in failing
to properly secure the handrail. Therefore, the language of the agreement
makes clear that WRGSB's insurance does not cover Insignia for its own
negligent failure to repair the broken handrail.
2. WRGSB's Liability to Kirschbaum
48
Insignia next argues that WRGSB cannot now seek contribution or indemnity
from Insignia because WRGSB did not prove its own liability to Kirschbaum.
Contribution applies when a plaintiff and defendant are joint tortfeasors. See
Builders Supply Co. v. McCabe, 77 A.2d 368, 370 (Pa. 1951). Contribution
comes into force when one joint tortfeasor has discharged a common liability or
paid more than its share of such liability, in which case the joint tortfeasor is
entitled to reimbursement from the other tortfeasors to the extent that its
payment exceeded its own liability. Conversely, the right of indemnification
arises when there is a "difference between the primary and the secondary
liability of two persons each of whom is made responsible by the law to an
injured party." Id. In such a case, the party that is secondarily liable may seek
complete reimbursement from the party that is primarily liable for any damages
the first-mentioned party has paid.
49
A party pursuing claims for contribution and indemnity can do so only if it has
established that it was itself liable to the plaintiff for the plaintiff's injury. See
42 Pa. C.S.A. S 8324(a) (West 1998) (contribution only available among joint
tortfeasors); 42 Pa. C.S.A. S 8322 (West 1998) (joint tortfeasor is, in part, one
who is liable to plaintiff); Builders Supply Co. v. McCabe, 77 A.2d 368, 370
(Pa. 1951) (indemnity may be pursued by a "person who without actual fault on
his own has been compelled by reason of some legal obligation to pay
damages...."). Insignia argues that WRGSB has not established its own liability
to Kirschbaum, and that WRGSB may thus not seek contribution or indemnity
from Insignia. However, while we think it likely that WRGSB was legally
liable to Kirschbaum --as we have noted, WRGSB is primarily liable for its
failure to correct the riser height discrepancy and secondarily liable for
Insignia's failure to repair the handrail --WRGSB need not prove this here. As
determined above, both parties are equally liable to Kirschbaum, but on their
own, distinct grounds: WRGSB's liability arises out of its failure to correct the
riser height discrepancy and Insignia's liability arises out of its failure to repair
the handrail. The parties are thus required to pay equal shares of the settlement,
representing their equal, but distinct, bases of liability to Kirschbaum.
Therefore, Insignia is not entitled to contribution or indemnity from WRGSB.
Insignia's argument that WRGSB must prove its liability to Kirschbaum thus
misses the point and does nothing to alter the parties' obligation to each pay half
of the settlement.
3. Kirschbaum's Assumption of Risk
50
Insignia lastly argues that it cannot be liable for its failure to repair the handrail
because Kirschbaum was aware of the broken handrail and assumed the risk of
any injury resulting from it. Under Pennsylvania law, assumption of risk is
established by showing that the injured party fully appreciated the nature of the
risk it faced and voluntarily assumed it. See Barnes v. American Tobacco Co.,
161 F.2d 127, 149 (3d Cir. 1998). In addition, the injured party must not have
had a meaningful and reasonable alternative path to avoid the risk. See Kaplan
v. Exxon Corp., 126 F.3d 221, 226 (3d Cir. 1997). Whether a party assumed a
risk is a question of fact that is reviewed for clear error. See Kaplan, 126 F.3d
at 225 (assumption of risk generally a question of fact); A&H Sportswear, Inc.
v. Victoria's Secret Stores, Inc., 166 F.3d 197, 201-02 (3d Cir. 1999) (questions
of fact reviewed for clear error).
51
Insignia argues that Kirschbaum assumed the risk of injury resulting from his
fall because he was aware of the broken handrail and had used the stairwell for
years in spite of it. We believe, however, that the magistrate judge correctly
concluded that Kirschbaum did not fully appreciate the extent of the risk he
faced. It is true that Kirschbaum was aware of the broken handrail, and thus
knew that it would not aid him were he to trip while on the stairs. However, the
risk presented by the broken handrail includes not just an appreciation of the
harm likely to result were Kirschbaum ever to need the handrail, but also an
appreciation of the likelihood that Kirschbaum would in fact have to rely on the
handrail to break a fall. This latter component of the handrail's risk was not
appreciated by Kirschbaum: he knew that he might accidently trip when
climbing the stairs, but was completely unaware of the riser height discrepancy,
which increased the likelihood of a fall and thus the likelihood that he would
need to rely on the handrail.
52
Kirschbaum also failed to assume the risk arising out of his use of the stairs
because he did not have a reasonable alternative route. While Kirschbaum could
have entered the building from one other entrance, this entrance--like the
entrance used by Kirschbaum--was locked when Kirschbaum arrived in the
morning. An Insignia employee provided Kirschbaum with the stairwell key
and directed him to use the stairwell. As such, the stairwell was usually the only
way for Kirschbaum to enter the building because he arrived at work before
other building entrances opened. Consequently, Kirschbaum had no other
reasonable route into the building, and he did not assume the risk presented by
the broken handrail.
III. CONCLUSION
53
For the foregoing reasons, the decision of the district court is Affirmed.
NOTES:
*
Honorable Richard D. Cudahy, Circuit Judge, U.S. Court of Appeals for the
Seventh Circuit, sitting by designation.
We recognize that WRGSB develops this argument more fully in its response to
Insignia's cross-appeal. However, because the argument could have been raised
as an issue for review in WRGSB's opening brief --which would have required
that WRGSB include the issue in its statement of issues for review and fully
develop an argument in the argument portion of its brief--we will not address it.
See FDIC v. Deglau, 207 F.3d 153, 169 (3d Cir. 2000) (issues not raised in
opening brief on appeal are waived). However, even if we were to entertain
WRGSB's appeal of the magistrate's factual determination, we would do so
under a clearly erroneous standard of review. See A&H Sportswear, Inc. v.
Victoria's Secret Stores, Inc., 166 F.3d 197, 201-02 (3d Cir. 1999). And,
contrary to WRGSB's contention, we have found nothing in the record to
indicate that the magistrate committed clear error in determining that WRGSB
was a "possessor" of the stairwell in which Kirchbaum was injured at the time
of the accident.